Category: Behavioural Finance

When Behavioral Biases turn away from the simple truth; what do you think happens to financial decision making?

Long-term financial planning is extremely important for lifetime financial security, but it is also exceptionally difficult for most investors. By improving decision making among clients, financial advisors can improve lifetime financial security. The average investor is less knowledgeable than professionals about the problem and has limited time and attention to devote to it. Understandably, investors may resort to rules-of-thumb, display biases, or behave “irrationally” in other ways. Not only does this make optimal long-term financial planning difficult for the average investor, but it presents challenges for advisors as well.